According to a latest study of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using savings to weather increasing financial challenges.”
Detailed Cases of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, further found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering UK local authorities, several key cities members were included in the most deprived in the country.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
